Matthew Maschler:
Welcome to the Real Estate Finder Podcast. I’m Matthew Maschler,
Staci Garcia:
The real estate
Matthew Maschler:
Finder. The real estate finder. I had a, I had spaced out there for a second. I was like, I wanna do the Matthew Mania Wrestling Podcast, <laugh>, but I was about, I was about to use that introduction. I’m Matthew Ashler, the Real Estate Finder, and you can, uh, find out about realestate finder@realestatefinder.com. And if you’re intrigued by what I said about wrestling, check out Matthew mania.com. They’re the official sponsor of the show today. We will have their commercial a little bit later. And with me as always,
Staci Garcia:
Stacey Garcia, also a real estate finder.
Matthew Maschler:
And we have a special guest in the studio today, Preston Smith. Hey Preston. Also a real estate finder. Also a real estate finder. So if you join the signature Real Estate Finder team, you two can become a real estate finder. Um, hope everybody is. Well, last week we had a real estate broker, uh, Ben Shater, uh, joining us on the show. And that was, that was a great episode. And after the show was over, after we stopped recording, we had a great conversation about the, the heat, how hot the real estate market was in Florida. I wish I had kept the tape rolling ’cause it was a fascinating conversation. So I, I wanted to, uh, talk a little bit about that today. Um, the, the, the, the hot real estate market in Florida, and it’s, it’s actually an interesting, um, concept because everybody thinks where they are, the real estate market’s hot, right?
If they live in a particular community, the oaks, they think the oaks is hot. No, all over it’s hot. Everybody thinks Bo Raton is hot. If you, if you are focused on Bo Ratton or, or if you live anywhere in the state of Florida, you’re saying Florida real estate market is hot, but it’s everywhere in the country. I, I, I spent Passover it, uh, some relatives in New Jersey and had to listen to the, oh my goodness, we can get so much for our home, but where would we live? Conversation <laugh>. So it’s not that everybody from New Jersey is moving to Florida. It’s, it’s that everybody is moving to houses, they’re moving, people are moving from condos. If you see the condo market’s a little bit softer. People want land. People want houses because we’ve really, um, changed, uh, in this new normal in the last two or three years.
Um, so I had a lot of thoughts and feelings about that, that I, I would like to, um, address in this show. But, but, but yes, in, in, in central New Jersey, people are talking about listing their house and getting, uh, above ask offers in one day with, you know, no appraisals. Um, it’s happening everywhere. It’s happening in every state. Uh, the only market that’s where it’s not happening as fast and furious, uh, from what I heard from a, uh, conversation at the, uh, Ratan Investment Club, uh, a few weeks ago, is the, uh, Hawaii market. Hawaii is not recovering as fast, um, from the, from the shutdown, uh, of 2020 as fast as other markets. And the reason being is people for a long time were, were not flying from the US and from California out to Hawaii. Um, if, if they had their second homes out there or, or whatever, people weren’t buying in in Hawaii as much. Um, I, I think if there’s another shutdown, what a, it would be a great place to, uh, to, to live and, and to wait it out. Um, what do you, what do you think about
Staci Garcia:
That? I was under the impression that a lot of people were moving actually, to Hawaii because they didn’t have to be vaccinated,
Matthew Maschler:
Right? So right during the right. But I think that that, uh, vaccination versus anti-vaccination thing is over with a lot of the vaccine restrictions that they lifted in, in, in New York City and, and other places. I think cruises are starting to open up again without, uh, without vaccines. I’m sitting here asking my doctor if I can get another booster <laugh>, because it’s, it’s spreading around. Again, I, uh, I’m not scared of covid, but I’m happy to get the vaccines right. So, so, um, so I wanted to talk about, uh, about the, the, the real estate market in general. And my thoughts on it. You know, a lot of people are asking me, uh, when the market’s gonna crash. And I mean, how would, how, how would I know? I, I don’t have a crystal ball and I don’t know even really agree with the premises. I don’t think we’re we’re due for a crash. I, I don’t think we’re in a bubble. A lot of people I hear are, are, do you hear people saying that they wanna wait the bubble out there?
Preston Smith:
Some people are, they’re more hoping for it. It’s not that they’re confident that there’s an actual bubble, it’s, they’re just kind of expecting it. ’cause it’s been such a weird environment with the prices and stuff.
Matthew Maschler:
I think you hit the nail on the head there, that, that, that’s fascinating to me. Uh, frustrated buyers, right? Who are not getting their offers accepted, who are not, um, able to get the same prices that they saw a year or two ago, um, are, are, are hoping for a bubble burst, right? They’re rooting against the US economy. They’re rooting against society, hoping, hoping for a crash. Um, when, when they say that they’re waiting or, or that this can’t be sustainable. I think they’re just, they’re just hoping that something bad happens. And, and, and that, and that’s why I don’t feel, uh, where in a, a bubble or, or a or, or a irrational, um, environment here with the prices of homes. Because, you know, I, I’ve always been a person who, who would bet on the, on the future and the success of, of markets, uh, real estate markets, stock markets, et cetera.
So, um, and over time, they, they, they, they trend up. And, and that’s what the, um, that’s what all the studies are showing. You know, the studies were showing back in February that where the real estate market is now, where prices are now, if the, um, bubble and burst didn’t happen 15 years ago, the prices now are where we would have been. Right? Had they not gone up. Yeah. And down. So, so coming out of Covid really put us in the h in the great housing recovery, uh, from, from, uh, from what’s been going on the last 15, uh, years. Um, and, and that’s why the house houses are high again. So, people who bought their house high, right? Who, who got foreclosed on and or who were underwater, um, the ones that held on their houses are now, well, as of a few months ago, priced where they were priced, uh, where they, where they should have been had we not, uh, had that, that roller coaster, that that hurt so many people.
Um, so I made a, a quick, uh, top five list of why, um, home prices are, um, are high and, uh, and, and the recovery, uh, that really we are in a, a correction or a corrected market. We, we’ve finally recovered from the boom and bust, uh, cycle, and prices are where they should be. And if, uh, home prices go up a few percentage every year, which is normal and expected, um, that’s, uh, that’s what will continue to happen. Uh, the people that are waiting for this great, um, crash. Uh, one of the reasons why, uh, there won’t be, is you need a lot of transactions to make a, a crash. Right? People have to sell. Well, there are a lot of people who don’t have to sell, right? If, if people are in their homes, anyone, anyone who didn’t sell in 20 and 21 and now 22, presumably they’re happy in their home, and they’ll be, and if they’re not happy, they’re, they’ll, they’ll at least, um, settled or satisfied or content.
Um, and they’ll be in their homes for, uh, a few more years. Their homes work for them, and which is why they didn’t make, uh, make a change and or they made the change. They did, they did their move in 2020, 21 and the beginning of 22. So, um, what’s going to cause a bunch of people to all of a sudden put their house on the market for terrible prices, right? And if that doesn’t happen, then there’s no bust. Yeah. Right? Uh, I saw, definitely, definitely saw, I talked about it all through 2021. One of the reasons that, um, prompted me to start this podcast was I saw in all those bidding wars that, that happened throughout the 2021, Stacey was with me in February of, um, of, of 21, uh, for the first bidding war that, that I participated in. And for the entire year of 2021, all those bidding wars, I chalked up to houses being underpriced.
And that’s why the market saw the inefficiencies and created those bidding wars. Uh, the real estate agents in the local communities, they were looking at comps. But in a highly rising market, the comps don’t tell you the current status. So if you look at a comp in Jan, if, if it’s February of 21, and you look at something that closed in January of 21, but didn’t go, it didn’t go to contract until October of 20, right? Then, then you looked at an October of 20 price, and it was priced low in October of 20, ’cause of panic. And because it was an inefficient market and people weren’t buying, so it was priced low in October of 20, the market changed several times over December and January of December 20 January of 21, uh, all, all that strengthening happened. And so that comp in now January of 21, was done with old data.
So the price that was set in February of 21, based on an erroneous January number, was priced too low. And that started some of the frenzy. And it really, you know, really opened my eyes. Um, after we, we, I got, I, I left that bidding order. I, I couldn’t participate in it. Uh, but then the, the, the very next, uh, customer deal that I did, uh, I really understood it. And I understood why my customer was paying $550,000 over ask not over ask for a property that no property in that, in that neighborhood ever sold for 180, right? $550,000 in a community of $180,000 houses mm-hmm. <affirmative>. And when I, when I first saw that, it was funny. I was, I was away. And I had one of my, one of my agents show the property, and I, they wrote the offer up at five 15.
I’m like, five 15, I’m, this house is 180. It’s not worth, this house isn’t worth 200. Why, why is it 500? Oh, Matt, it’s really nicely furnished and decorated. I don’t care how much <laugh>, but, uh, I didn’t see, and, and I did, and I, and I did see, uh, the beginning of this. And, uh, and those houses are now selling in the $800,000 and $900,000. Uh, there was a house, uh, Preston, you remember the house in, uh, Boca Greens, uh, we got the listing for four 60, but then, um, one of my agents got into a fight with the owner, and I lost the listing. Yeah. And then eventually it sold for 4 75. Yeah. 2019. Mm-hmm. <affirmative>, it’s on the market for one, two. I mean, I’m not, I’m not surprised. Look, if you look, if you look at the pictures, it’s the exact same, same kitchen, same flooring.
They painted the exterior. Mm-hmm. <affirmative>. And I swear to you, if you look at the, at the 2019 picture, you’d think that was the new picture. Yeah. ’cause it was a beautiful yellow, and they painted it this pale peach. And I’m like, oh, you, you painted this house. Whoever painted this house makes made the house look like it, it, it hasn’t been painted since the seventies. And it’s now listed for one, two, I don’t know if they’ll get one, two, it’s a three bedroom, two bathroom house in Boca Greens. But, and it’s, uh, not walking distance to the Habad, because that’s, that was one of the fights I had with the owner. Um, he was convinced that you could walk to the, uh, to the, to the, uh, west Boca Raton Habad Center. But, um, unless you crossed through, uh, two fairways, <laugh> <laugh>, it was not walking distance.
He insisted that you should be able to walk through the fairways. I said, you cannot, there can be ball, probably would enjoy that. There, there could be balls flying through the air. Yeah. Wrinkler can go on there. You, you get caught once the rangers are going to stop you, you cannot Trae through a golf course. <laugh>. So, um, so yeah. So that house is, is, is listed an insane high price now. So there are houses in this market that are just overpriced, right? Mm-hmm. <affirmative>, I mean, you, it’s not true that you can just throw on any number, but you know, the, these, the, the prices are higher than they were in 2019 and in 2020. And, uh, and, and, and if we, and if we go through our five reasons, we’ve now talked about the recovery mm-hmm. <affirmative>, um, and, and then we also have to talk about supply and demand, right?
Uh, it’s, it’s not true that just that everybody wants to be in Florida. Everybody wants to be in Boca because of that conversation I was telling you about that I had with cousins in New Jersey, um, all over the country, houses are selling. Um, it’s, it’s, there’s just not enough inventory. I don’t know. It, it seems weird. Like, where are all these buyers coming from? They’re, they’re coming from smaller places. They’re coming from apartments. Uh, their rents got increased significantly because the value of the house was increased significantly. So now they wanna buy and, um, and, and supply. And, and it’s not so much supply, it’s just, there’s so little demand in, in my community of 1200 homes, there are five houses on the market. Um, and of those five, some of them are, are, are just, for whatever reason, they’re, whether they’re too expensive or, or too dated, um, and too expensive, it’s, uh, they’re, they’re, they’re not really great options for people.
Uh, I got a call, uh, from an agent friend of mine over the weekend. Do I have anything off market in the oaks? They’re looking for five bedrooms, 5,000 square feet. And I said, there’s 13 homes in the oaks that are five bedrooms, 5,000 square feet, actually nine, uh, four more that were 4,700 to 40, you know, so just under 5,000 square feet. So if these people are looking for a five bedroom home in the oaks, and nothing on the market, uh, appeals to them, they have 13 options. If none of those 13 options work, they’re gonna have to settle. They’re gonna have to give somewhere, whether it’s giving on the square footage and going to 4,700 square feet, ’cause of, instead of 5,000 square feet, I don’t know why that 300 square feet would make such a difference to them, but there’s four houses, uh, that they should look at, uh, low.
They, they have to settle. Um, so lower that, um, that criteria. But of the 13 homes or or nine that fit that criteria, if none of those work for your customer, then no imaginary off market home will work for the customer. Or really, or let me understand, let me understand what it is. Okay? These four homes were 300 square feet too small for you. I get that. And the, and these nine homes, what about these nine homes don’t work for your customer? Because what I’m trying to say is to, to this agent, I said, what I’m trying to say is this cust, this isn’t a real buyer. There’s, there’s, there’s a disconnect. Mm-hmm. <affirmative>, there’s the, you, you can bang your head against the wall all day long. You’re not gonna satisfy this buyer, probably because they saw the same three years ago for 800,000, and now they want two, three, right?
Um, and if the problem with the nine homes on the market are all price, then it’s not that those nine homes are overpriced, it’s that your buyer budget, he cannot afford what he used to be able to afford. Um, and that takes us, uh, really out of, of the supply and demand. Um, uh, it, it might be supply and demand, but, but if it was pure supply and demand, then theoretically, when the demand dries up and the supply increases, prices will settle. Uh, but we don’t see the supply drying up anytime soon. And we don’t know, see the demand drying up anytime soon. So, okay, so reasons why homes are priced higher, I’m not gonna say overpriced or priced higher than they were before. We have supply and demand. We have the recovery. Um, but you know what happened in 2020 when people were home, right?
They couldn’t go on vacation. Um, the, the, the money that they would’ve spent on a, on a vacation or on a cruise went into the house. They put in a pool. All, all my friends in the pool industry are, um, you know, were very busy. They put in a pool, they redid a bathroom, they redid a kitchen, they improved their house. They physically improved their house. So if we’ve, if people put money into their houses to improve their houses, then the price of the houses would go up. Mm-hmm. <affirmative>. Yeah. So, right. So this isn’t a bubble, this isn’t irrational, this isn’t for any other reason. But a house that used to go for 500, let’s say, if we’re gonna be specific in, in, in Boca, uh, where I see this a lot, is on St. Andrews Boulevard, the non gated communities. Mm-hmm. <affirmative>, the Mill Ponds, timber Creeks, uh, new Fluor Restas of the world that are getting premium, premium prices.
They’re getting premium prices because they’ve improved the house. The house now has a new roof storm, you know, hurricane, hurricane windows, new kitchen, new tile, and a and, and you’re seeing, oh, $1.2 million for a house in Mill Pond. I’ve never seen a house in Mill Pond for $1.2 million. Well, this house is completely updated with a modern kitchen and, and nice bathrooms at a pool, a new roof, new hurricane shutters. It’s new construction. It’s a four bedroom, 3,200 square feet house. And that’s what the market is paying for houses of that size in, in, in that condition. So as people put money into their houses, it’s no surprise that the price of houses went up. And it has a little bit of a, of an effect of raising the prices in the neighborhood and, and giving you comparable, comparable, you know, strong comps. Yeah. Uh, and that way someone can buy a 500 or $600,000 house knowing that it’s safe to put in the money and to upgrade, because okay, well, if, if the renovated houses are getting one too, I can buy this unre renovated house and renovate it.
Whereas in the prior market, if the houses were all selling for 500,000 and a renovated house wasn’t getting so much of a premium, then people didn’t want to buy the house because it wasn’t, because it was dated. And they didn’t wanna put 300, 400,000 into a dated house and not get their money out. Now that people know that they can get their money out, they’re willing to buy the houses in Estancia and Estancia South and Mill Pond and Timber Creek, they’re willing to buy those houses that are 25 and 30 years old, invest in them, uh, renovate them and be confident that they can get their money out. So, uh, that’s a real, real tangible reason why home prices are up, because people are investing in their home, improving their home, and they’re, the home is worth more money. Um, and the Unrenovated homes have potential to be worth more money.
People can be more willing to buy them. Um, and, uh, therefore the value is up. That is a, the, a very, very real factor that is not a bubble. That is not something that will end in two years or three years when people all of a sudden decide that now is their time to buy that, that, that, that’s a tangible, tangible, real reason. Um, on a side note, here, in, in, in, in Boca Ratan, you have, um, a lot of, um, uh, residential country clubs. So I didn’t even put this one on my, on, on my five list. Um, when I moved to Florida in 2005 and 2006, a house in a residential country club had a premium to a house outside of the club. So whether it was Woodfield or Broken Sound, or Polo Clubs, St. Andrews, uh, there was a premium to those houses because people wanted to be in a country club.
When the market crashed, it was a negative. People didn’t want to be in the country club. Well, I’m gonna say it. Don’t, don’t, don’t, you know, mute your radio. Certainly. Uh, the last president encouraged golf. So before the, the virus golf kind of became cool again, and people were playing golf again. And that has always ebbed and flowed, uh, that started the increase in country club communities, uh, uh, under the prior president, um, I’m not gonna say his name because I don’t wanna be muted or, or somebody press one of these buttons on me. But, um, it’s, it’s just a thing. Golf, golf became, before Covid Golf became popular again when it wasn’t popular for a little while, but once, um, once we were under quarantine, um, living in a country club community became desirable because,
Staci Garcia:
Well, you can also golf without having people around
Matthew Maschler:
You. Right? You could, right. People were playing golf in their own cart, right? You could still have your foursome, but everybody could be in their own cart and they could maintain separate social distance and play together, uh, outside social distanced. Um, so that was good. And then, you know, if you couldn’t vacation, it was desirable to live in a country club community in Florida. If you couldn’t go to The Bahamas or couldn’t go on your golf vacation, I know my, my brother, uh, liked to come down to Florida on a, on a golf trip with his friends, uh, you know, every January. Uh, but he couldn’t do that because in 21, because if he came to Florida, when he got back to New Jersey, not only could he not go to work for two weeks, uh, his children couldn’t go to school for two weeks. So there became a huge demand for golf and country club amenities, which took, um, combined with the limited availability of properties, took, uh, communities like Boca Woods and Stonebridge, and, um, and Wycliffe Country Club, which houses were selling for two hundreds and three hundreds, and now they’re selling for eight hundreds and nine hundreds and, and a million too.
Um, because you can get a, you, hey, look, there’s houses available, and it’s, and you can go and you get, and instead of a negative, instead of negative, I have to join a country club, it became, I want to join a country club. Also,
Staci Garcia:
I, I think that, uh, one of those secret things that nobody knows about is that in the country clubs, they gave their toilet paper away to their residents.
Matthew Maschler:
Yeah. Um, well, <laugh>,
Staci Garcia:
They were wiping and we weren’t
Matthew Maschler:
<laugh>. Yeah. A lot of clubs created a, a, a pantry or a market that if you, um, if you needed basic kitchen supplies, flour, sugar, bread, eggs, butter, instead of gonna Publix, you could order from the club, uh, the marketplace from, from your club, and, and then either pick it up or have it delivered. And then you didn’t have to make that trip to the supermarket when you were trying to social distance. And it was good for the club because they needed to maintain their relationships and, and, and, and keep their, keep their orders high. So it was a, it was a good way to, uh, it was a good hack to get through, uh, through some of the supply chain shortages that, that we saw. So, um, so that’s, that’s, that’s three, four reasons why. Um, okay. So, so the next reason I have on my list of why the prices are of homes are legitimately high mm-hmm.
<affirmative>, and it’s not a bubble, by the way. This is, this is my opinion. Please don’t rely on it. I think you should rely on it, but for legal reasons, uh, you have, you can feel free to agree with me or disagree with me. I am not responsible for, uh, any investments that you make based on my, my decisions. Um, you know, markets go up and down all, all the time, but this is, this is just my opinion, what I see, um, we talked about all the, the, the, the improvements that people made to their homes. Mm-hmm. <affirmative>. Well, here’s another reason why. Home prices are high. The cost of goods of those improvements are now up. So if you put on a new roof or a, or a new window, but now it’s 25% more to do that. Right? So if you buy a house that’s renovated, you should pay a premium, because if I have to put on that roof, that roof, that roof that costs $13,000 in 2019 is now $20,000.
Right? So it’s a, there’s a 40% increase in the roofs and in the windows. So why are the price of houses up? Well, because the things that you need to make a house are up, they’re higher than they used to be. So if the price of roofs and windows and, and, and, and wood and, and building materials and toilets and, and appliances, if the price of all these things are, are up, then the value of the home that contains all of these things are up. Yeah. So because the price of things are higher, the value of the house is higher. I mean, just that reason alone that the value of the things that make a house are higher in 2022 than they’ve ever been. Washing machines cost more money. Dryers cost more money, kitchen appliances cost more money. Uh, so obviously the house is worth more money.
Preston Smith:
Yeah, I was just saying, and not only that, but with the, the cost of materials and appliances and stuff like that being up higher, um, it also took a lot longer to get things done. Yeah. So it became even more of an inconvenience when you,
Matthew Maschler:
We had to cost the cost of labor. Yeah. Cost labor. So if I have a house that’s renovated, um, that’s going to be worth more than a house that could be renovated, right? You take the house that could be renovated, put the budget in for the renovations. Well, that budget, right? That’s gonna be higher now than the renovated house. Discount it for the time it’s gonna take to make the renovations and the premium you’re gonna pay pay for work. Yeah. I’d rather buy a house for 1.2 than a $500,000 house that needs $800,000 to be put in the same condition. That’ll be 1.4. And it’s a year away. So there’s a, a, a value to the existing house that, that’s already a premium, which means that 1.2 hou million dollar house is not worth one two anymore. It’s if it’s, if it costs one four to recreate, and we wanna sell it now, maybe it’s worth one six because somebody wants it now and they don’t wanna do the work and wait a year.
So the value of the home went up because of the value of the materials and the cost to do the work. Um, so, uh, and the last thing that I have, the, and this is what I’ve been saying for months to really anyone who, who, who will listen, um, is we, we’ve redefined the home. Uh, we’ve, we’ve put a more of a value on the home. You’re safe at home, you can work from home. How many people are working from home two days a week? Three days a week? Um, seven days a week. Right. But, uh, uh, you know, I was talking eight days a week. I was talking to another relative over the, over the, the hol holiday break. And, and they’re allowed to work from home two days a week. And, and before Covid, that was not a thing. It was like one Friday a month.
Right. And they’re allowed to work from home two days a week. Well, we’ve put, we’ve redefined what home means and the value of home. Uh, I was talking to somebody last night, um, one of my wrestling friends, and he, he, he does, um, he has a day job, but he also puts on wrestling shows all throughout the state of Florida. Um, and, you know, before Covid, he was out every single night. And, um, you know, now he’s home four nights in a row. And before Covid, he couldn’t think about being home four nights in a row. And, and, and, and he is happy. He’s, he’s happy to be home four nights in a row. And he, he never thought he could be happy. So we’re happier at home. We wanna spend, uh, more time at home. I dunno if you watched, uh, Saturday Night Live when Gerard Carmichael hosted, there was a game show.
Um, uh, what is something wrong with my brain? And the premise of the show was, uh, these are all questions that you knew before Covid. Oh, yeah. But having stayed home for two years and not talked to anybody, maybe you don’t know what this is anymore, or what is this called? Or is there something wrong with my brain? So the guy that won it, um, uh, he, his grand prize, he had a choice, uh, a one week trip to Hawaii. We talked about Hawaii already. One week trip to Hawaii. Beautiful hotel in Kauai, all inclusive. Uh, or, uh, he could go back to his apartment. <laugh>. <laugh>. I’d like to go back to my apartment, please. <laugh>. That’s funny. So we’ve, the intrinsic value of a home, uh, how we define home, what we think of home, how we value the importance of home, uh, has changed.
And, uh, as a society, we put more value on, on, on the home. Um, and because we value home more, the home is obviously worth more. And to me, that’s the biggest reason why this has been going on in, in 2020 during the pandemic, it was just a scramble to find a place to live, to ride out the, the, the shutdown. Yeah. But no, it turned into, um, a major, major change in intrinsic value of what it, what a home means. And if being home, spending time home, working from home, um, has increased and the value of our, uh, of, of what’s we as a society put on a home increase, then obviously the value of the house, uh, has gone up, uh, with that. Um,
Staci Garcia:
And so, do you remember when we used to take a home office and make it into a bedroom to make the house worth more? Right. Right. <laugh>, now we have a bedroom in a, in a house, and we’re like, this will be a great home office. <laugh>. Yeah.
Matthew Maschler:
Yeah. <laugh>. So, um, so those, those, those are the reasons, uh, that I think, um, the real estate market is strong. It’s why I’m still investing in real estate and still advocating for real estate. I, you know, I’m, I mean, I’m, I’m always looking at investment properties. I saw one in a community that I liked that Preston showed it to me yesterday. What’d you think of that property? I mean, it was beautiful on the inside. The location was not great. ’cause you’re right by the turnpike. It was a two bedroom and a 55, and over that, back to the turnpike and I, the noise inside, like in standing in the kitchen mm-hmm. <affirmative>, I, I couldn’t deal with, it was really loud deal with the noise, uh, in the bedroom, you couldn’t hear it, but in the kitchen you could. And they wanted $379,000 for it. And I don’t know if that would’ve been worth 85,000 before, um, before Covid. So it overpriced. I don’t know that I, I would’ve bought that property. Right, right. Because it just, it just didn’t work because of, of, of the turnpike. And, and, and it was small. Um,
Staci Garcia:
And I think if you even see something in the three hundreds and four hundreds right now, you almost feel like you have to buy it. <laugh>. <laugh>. It’s like going to store.
Matthew Maschler:
That’s, we
Staci Garcia:
Have a spike. It’s like going, it’s like BOGO at Publix. You have to buy it, even if you don’t really need it, but you’re like, you’re getting two. Well,
Matthew Maschler:
I gotta buy this. ’cause I, if I come back next week, it’s gone. No, next
Staci Garcia:
Week it’ll be 600
Matthew Maschler:
Because
Staci Garcia:
Someone’s gonna come to their census. Right.
Matthew Maschler:
I, but yeah, I wouldn’t have bought that one for the low twos. And, uh, you know, so, so we will see that. We will see, um, h houses priced high and, and, and priced wrong. Uh, so you have to be smart in this market. Um, but I, I do think that standing on the sidelines, I, I don’t know if that’s ever worked for anyone, uh, in investing.
Staci Garcia:
Well, the people that I know that have stood on the sidelines are, are beating themselves up. Yeah. Because they just lost $600,000 mm-hmm. <affirmative> by not buying a house last year.
Matthew Maschler:
But, um, and they’re, and how, how’s their rent?
Staci Garcia:
It’s insane. And, and if, if they have rent, it’s insane. Obviously they
Matthew Maschler:
Got jacked up,
Staci Garcia:
But, or, you know, they’re just desperate for a house. The people that I’ve noticed, uh, where they price the house at around 300 per square foot in Boca at least mm-hmm. <affirmative> in central Boca, um, are pricing low. And the demand is so high that, like, the deal I’m working on right now, I’m sure that it will go for between 250 and $500,000 over ask Uhhuh <affirmative>, which is unbelievable. Yeah. Here,
Matthew Maschler:
So 500,000 over ask is, is,
Staci Garcia:
It makes me wanna say that the house obviously should have been priced better. Mm-hmm. <affirmative>. But it also, maybe it’s the strategy on how to get a, you know, your highest and best.
Matthew Maschler:
You know, I I, I think you have to price it right in the first place. I mean, I do, you know, realtors do have fun with that game of trying to create that frenzy. A lot of sellers want that frenzy. I try to do it once, not in this market a couple years ago with a friend of mine that was into auctions. And, and, uh, so we did a whole auction on a, on a, on a, on a horse farm up in Loxahatchee. And at the end of the day, we sold it at Market. Right. You know, that’s, that’s the, the, the, I’m such a capitalist. I, I believe that the market knows all and fixes all and takes care of problems. It’s, um, you know, there’s, the, the irrational exuberance does, uh, tend to hurt people and, and feed into markets. But a lot of what I’m seeing now, um, I mean, I don’t know anyone, none of my customers, um, that paid record prices in the last three years overpaid.
Right. I, I don’t have any customers regretting, uh, what they paid at this point. And, um, and I’m hoping that’s, that stays the same, you know? Yeah. I’m hoping that’s true in five years and 10 years, and I believe it will be true in, in, in five or 10 years. But, um, but, uh, you know, a lot of people ask me what I think of the market, and, you know, I, I don’t know if it’s a social situation. I’m like, how much time do you have? And <laugh>. And that’s why I I turn to this podcast. And I, I think we have more than our, our five reasons why, um, uh, the, the prices of h of houses, um, one are so high. But, uh, why we’re, in my opinion, we’re we’re not in a bubble and we’re not gonna see a recovery. And if anything, uh, we’re only going to see increases, uh, in the next, uh, several years. Um, and, and people just have to accept this as the new normal.
Staci Garcia:
Yeah. I don’t see, well, I don’t have any clients that work with, uh, credit. Everybody I know that I’m working with uses cash.
Matthew Maschler:
Did you ever think you would see that in your life?
Staci Garcia:
I, I feel like it’s a little bit ea It’s, it’s like too easy, you know? Mm-hmm. <affirmative>. Oh, yeah. The hard part is getting an offer accepted, obviously. So I’m running offer after offer on a whole bunch of different properties and not getting any of them.
Matthew Maschler:
But are these cash buyers getting mortgages they’re just making mm-hmm. Because that’s the next thing is, you know, the mortgage rates have gone up a little bit. Yeah. And, and a lot of people think, uh, that, that that’s gonna be telling and that’s gonna, you know, indicate the end of days here. And, and, and I haven’t seen it yet. I haven’t seen any, uh, pushback on the, on the, because of, uh, the, the mortgage rates being up. And, and also I’m old enough to remember when mortgage rates were significantly higher. Mm-hmm. <affirmative> 7% in, in, in the eighties and things like that. I
Staci Garcia:
Feel like it’s, it’s down here. We’re in a destination location. The location hasn’t changed. The house changes, right? Yeah. Time passes and the house gets older, and eventually the house needs work. So if you don’t keep the house going, or you’ve, um, you know, you’ve lived in the house for your time and you’re ready to sell it, then it goes to the next person who’s gonna revive the house. Because the location of the house is, is most important thing. So the property is not necessarily the most important thing. It’s the location and the location is where the money is. So if you are looking for property and you’re like, why is it so expensive? Even though the house is 40 years old, you’re thinking kind of wrong. You have to think, well, this was 40 years ago, the place to live. Yeah. And this is still the place to live. It’s just the house needs a little bit of love, so you have to revive it. And so that’s why neighborhoods a whole neighborhood, um, like St. Andrew’s Country Club could go down and they rebuild and new houses so that it comes back with all brand new houses in another 40 years. The same thing would happen, you know, all new properties in the same exact development. ’cause the property, ’cause the location is
Matthew Maschler:
Perfect. Absolutely. And speaking of location, I want to go to our commercial. Okay. I didn’t plan the commercial in advance, but, um, it’s the end of April right now. I don’t know when you’re listening to this podcast. 2022, uh, coming up on Sunday, May 15th, at the Boca Raton Black Box, the Boca Black Box on Glades Road, uh, near the turnpike, we are having the first ever Boca Raton Championship Wrestling exhibition. Uh, this is a professional wrestling, uh, event that we’re putting on at the Boca Black Box. You can find more information on@bocaratonwrestling.com. Uh, there will be, uh, a lot of the wrestlers they used to work for w e currently work for a e w. Uh, so if you’re out there in the listening audience, and you would like to, uh, come to a great show, uh, have a lot of fun. If you haven’t seen professional wrestling since you were a little kid, come out to, uh, the book of Black Box on Sunday, May 15th from four to 6:00 PM is, uh, autographs and meet and greets with the wrestlers.
And then six o’clock is the first match. We have eight matches lined up. It’s going to be a blast. And I’m hoping a lot of my listeners come out to the, uh, black box on Sunday the 15th for Boca Raton Championship wrestling. Boca Raton wrestling.com. Good seats still available by your tickets today. Stacy, are you gonna be at, at the wrestling show? I am. Do they have food? Um, can we talk about that later? I’ll get some snacks. I’m trying to figure, I actually wanna talk about if I’m gonna bring a food truck in or, or what I can do for catering. I’m on it. Okay. Um, but there, there will be a bar. Okay. Um, yeah. And bar snacks. So, um, a Preston, you’re gonna be there. Yeah. It’s totally fetched. So I’m gonna totally fetch, I’m gonna definitely come, I have some flyers I want you to bring to the Cavo bar.
Okay. Yeah, totally do that. Yeah. All right. So, um, thanks for listening to my commercial. We’re gonna have, uh, more commercials, hopefully <laugh>, uh, shout out to the Garden Cemetery, uh, Bo Raton, uh, on military trail, if, uh, they’ll be there for you in your time of need. Uh, pre-planning, uh, arrangements are very important. Uh, so shout out to the crew at the Gardens Cemetery, uh, the gardens.com. And, uh, the next part of the show that I have written out, I have a little, uh, outline of the show, is, uh, I want to, uh, answer a listener question. Oh, awesome. Okay. So we had, um, we had a, a, a, a listener who was a real estate agent, who, um, got their real estate commission from a sale of a new construction community. And, um, the perce, the, the check was short by a thousand dollars.
Um, basically, uh, there was a credit given to the buyer, maybe there was a promotion, uh, for some reason. Um, so the contract price was X. Um, but the commission was based on an, on an amount lower than X. And, uh, and, and the, and my, my listener asked me if it’s if, if the, if the, if the, um, commission can be lowered, uh, based on such a credit, uh, to the buyer. And, uh, I wanna explain that works. Um, the seller, when the seller puts a house in the multiple listing service, uh, puts an offer of compensation to the buyer’s agent. So when I see a house in, in, and if I’m gonna show you a house, and then the house is listed for 600,000, it tells me what percentage I’m gonna get of, uh, the purchase price. So if we go to contract, not the m l s price, but whatever the purchase price is, lower or higher than, than the, than the purchase price, I’m gonna get a percentage.
Uh, so let’s say the seller, um, in, in the negotiations, the seller offers the buyer a $30,000 credit because there was problems with the roof. Well, the commission’s still based on the purchase price. Um, the agreement is between the buyer’s agent and the listing agent. In the M L Ss, the agreement has nothing to do with the contract. The contract price is a term, but at the, the M L Ss controls, uh, the commission offered. So sometimes a listing agent might, instead of offering a $30,000 credit, they might lower the purchase price by $30,000. And in that case, the commission will be, will be reduced because the purchase prices is less. But, um, but when there’s a just a credit from seller to the buyer, there’s no, uh, reason why the buyer should take less commission. I had recently experienced this myself with a, a new construction community.
Um, and, uh, but, but the, but we walked into the sales center and I registered my customer. There was no multiple listing involved. And I had an, an agreement with the, uh, with the builder for my compensation. And in that agreement, it explained what the, uh, commission would be based on. So even though the purchase price was X, there was, uh, some kind of promotion or credit to the buyer. And I wasn’t paid on, on, it was a $7,500 issue out, it was $200. It wasn’t a big deal. It was just that my paperwork was conflicting, but they had the right to lower my percentage based on the purchase agreement. This builder, this other builder, the the listener question, it was a property that was listed in the M l s. So the builder did what the builders always do, like what happened to me with the, the builder’s, um, agreement.
But they chose to put it in the multiple listing service, and therefore the multiple listing service controlled, because there was no other agreement for commission. There was nothing that the agent signed. There was no other agreement outside of the M L Ss. So the builder actually made a mistake. Um, and you don’t really wanna hold the builders to that. ’cause we want the builders to cooperate with agents. We don’t wanna give the builders reasons why not to cooperate with agents. So I told the, I told my agent really, that they shouldn’t push it because it’s that the builder put it on the m l s. Right? He may not have found the property for his buyer otherwise. So it’s good that the builder put it on the M L Ss, um, and, and, and des the brakes <laugh>. But in the real world, you know, and, and you really don’t wanna be pursuing an, uh, a claim against the, the, the, the, the broker, uh, for this money.
It’s just, even, even if legally you would win, it’s, um, it’s just, you don’t wanna do that with the, with, with the builders agent. ’cause you, we, we need builders. We like builders in our industry, and we like when our builders, uh, offer to pay us. And, and, and there are, there are builders out there that, that, that have reduced, uh, what they’re paying, um, to agents. And, and, and we don’t like that. We like builders that wanna cooperate with agents. So, um, so it’s something to think about when you’re working with a builder. Um, if it’s not on the MLS that, you know, my particular instance, the, you know, I got paid on the, on the, on the initial price. I didn’t get paid on any of the upgrades and pools and other selections that the, uh, that the buyer made. And, and that’s just, uh, you know, how it is in, in, in, in building.
But, um, but I didn’t get paid on that promotion either that they, that they credited and, which, which is fine. But, uh, but the agent that asked me this question, uh, you know, he was kind of looking at it as an M l S deal, and the builder was kind of looking at it as a builder deal. So sometimes, uh, those things can’t conflict. Um, it’s important to understand how the M L SS works and how these relationships work. Um, the listing, it’s the listing agent that owes the commission to the buyer’ss agent. It’s not the seller, uh, or the buyer. Um, it’s the listing agent. The listing agent offered to X percentage in the m l s. And, and even if the listing agent didn’t collect that from his customer, right? It happens. The listing agent makes a mistake. The listing agent takes a listing for 5%, they put 5% in the mls.
Well, that’s how much they’re paying me. That’s, that’s not, you’re not supposed to put in the MLS what your total commission is. It’s what are you offering the buyer’s agent? And, uh, and if you put 5% in and you’re listing it was only four point a half, you have to go outta your pocket for that other half. Um, but I think for, uh, for builders, um, uh, they’re treated a little bit different. But then also, uh, as a seller, um, if you’re aware of this, um, when you’re, um, giving a credit to the buyer, uh, you may want to consider lowering the purchase price and not, uh, doing an addendum. And, um, that’s just a, I
Staci Garcia:
Don’t think any sellers are giving credits to
Matthew Maschler:
Buyers. That’s true too, in, in, in this market. That that is definitely, that is definitely true. It’s a little, it’s a little bit moot. Um, when I had a, I had one investor client a couple years ago that I worked with, we put in the broker remarks that the, uh, commission would be a reduced by any, uh, credits. Right? Um, and that because the m l s controls. So, um, so that was, uh, that was a term we used for this one investor customer, um, which I kind of liked, um, even though it was a little bit dirty. All right. So, uh, so what else we got? Uh, we have a new hou, uh, listing in seven bridges, uh, back on the market. A beautiful, beautiful house. So if you’re interested in, uh, seven Bridges, uh, please, uh, please reach out to me, uh, or Stacy or Preston. Preston, why don’t you give ’em your contact information?
Preston Smith:
Sure. My phone number is (843) 532-1941. Or you can email me atPreston@realestatefinder.com. And
Matthew Maschler:
Stacy, oh,
Staci Garcia:
It’s stacy@realestatefinder.com. And you can check out my site. It’s, um, www.nohoaboca.com. If you’re looking for a house that’s not in a country club or in a community with a guard gate, or you don’t want any rules, um, gimme a shout out. 5 6 1 2 3 9 1 4 4 9.
Matthew Maschler:
No H OA Boca. I love that one. And then, uh, we have a two bedroom in West Palm Beach for, uh, $280,000 at the Presidential. That is a great unit. If you know anyone that’s looking for a condo in West Palm Beach, uh, we had a, uh, we sold something recently in, uh, in Lake Worth in Thoroughbred Lakes. Uh, we sold it for a record price, and we got another, uh, property listed and, uh, put it for $30,000 more, and it sold in a day Nice, uh, relatives of the other buyer. So they, that that was, uh, that, that was a, a nice, uh, transaction. It was, uh, it, it was quick. And, uh, it’s always fun when you have some easy ones to, to weigh against, uh, way against the difficult ones. And if you’re looking, uh, to, uh, buy or sell real estate, feel free to reach out@realestatefinder.com. Tell us, uh, that you heard about us on the podcast, and we will treat you with extra smiles. <laugh>,
Preston Smith:
Smile, emojis.
Matthew Maschler:
Alright. No win. Uh, have you Mother’s Day coming up soon, make your plans for Mother’s Day, May 8th, and, uh, then make your plans for Boca Raton Championship Wrestling. May 15th. Yes. I’m Matthew Ashler, the real estate finder.
Speaker 5:
The future looks bright and the storms pass by the sky’s dog. Blue. When it’s almost that time, light shows cameras flash when I pass living in the moment, forget about the past. They save the best for last. Matthew Mania. We about to make a splash. Life is a marathon full of sharp turns, gotta keep pace, the hands on the turns. High stakes five star. I run a show. You could tell the bus center place electricity, energy if vibrate. I’m always on time. Even if I’m making, I make dreams come true. Living my life. Hope the same for you. Success. My sights got a real clear view. If you don’t know the time I give
Speaker 6:
Know it’s, it’s, you know, know what’s on. You know what’s on. You know what you know, it’s on. You know, it’s on. You know what time. It’s, you know what’s on, what’s on. You know what time it’s,
Speaker 5:
You know what time. It’s, you know, time. It’s, you know what time It’s Matthew Mania. The time it says, you know what time it’s, you know whose time it’s, you know what time It’s Matthew Mania. The time it says, yeah. Got him shook, scared. Can’t look. We’re not afraid of the big bad wolf first comes to right?
